Luck Favors Those with a Plan

Have you ever wondered what makes your business successful? Or, if it is not as successful as you would like, what holds it back?

Most likely, the answers to these questions are really the very same thing: values. They can be good or bad, practiced overtly or covertly, expressed or unexpressed. It follows, then, that the questions for a an organization are:

What are your values?
Have you expressed them well?
Do you practice them?

Values or Liabilities?

At a recent holiday gathering, I ran into a business professor who asked me what my strategy was to help family businesses. "It starts with sound family values," I said. "But family values are exactly what screw up family businesses," said the professor. "Then they are not really values, but liabilities," I retorted. I continued to assert that every "liability" holding a company back could be attributed to the failure to apply a sound value or principle. But what do these look like?

Here's an example we consolidated from a number of companies which we observed over a number of years.

"Smith & Company" Family/Business Values

Sincerity of Purpose
We are committed to discover and help to achieve the objectives of our customer, employee, supplier and shareholder relationships. We will always seek to help our children to find their individual vocations in life and develop their unique talents.

Honesty and Integrity
We will be truthful with each other and with our business relationships. We will be forthright with each other and discuss things with those with which we have a problem first, refraining from indirect criticism or gossip to influence others to do things "our way". We will be diligent and honest with accounting and paying of taxes.

Accountability
We will define what we are expected to do and the expected results, accepting responsibility for actions and results at every level in the business: Company, Departments, and Individuals.

Work Ethic
We will diligently perform the tasks assigned to us and always seek to do more to improve results. We will set a good example for non-family employees.

Respect for the Business as the "Provider"
Nobody here "has it made". Quite the opposite. We have to be extra vigilant to keep this business strong, productive and profitable and put our best efforts forward. The business provides income and wealth for the family in support of family objectives. We should never handicap the business with policies, decisions or actions that make it less competitive.

Ownership shares based on participation
Those that are qualified and work in the business should be given higher shares and voting power than those that do not work in the business.

Hiring and advancement based on qualifications and merit
We will review qualifications and performance to make decisions on who to assign to available work positions and who to promote to management positions. Family members will not just get these positions automatically. Nor will we hire family members simply because they are "there" and we would like to avoid the time it takes to explore the workforce. We will always consider outside talent to work in AND run the business if it makes sense for the good of the business and the return for the family.

Professionalism
We will act professionally in the workplace and in front of customers, suppliers and employees. We will deal with family issues at home, avoiding these in the workplace where they can affect quality and timing of important actions or decisions. We will come to work to devote our time to work. We will create and execute solid business plans that create profitable growth for the company and rewarding positions for both family and non family employees. We will conduct regular reviews of operating results which result in an ongoing agenda of action initiatives to take advantage of new opportunities and adjust strategies and tactics in the short run.

Productivity
We will establish productivity measurements and benchmarks for critical company functions in order to increase output provided for associated labor, capital and expense inputs while increasing speed and reducing waste.

Profit
Profit is a reflection of the value provided to customers and the productivity of your operations. It is necessary to keep investing in our business, not only to keep serving customers, but also to change and improve what we do. If we have done a good job of serving our relationships, we, as owners, are entitled to a fair return on investment.

What you can do with this information:

Don't run off and hand this out to your family business associates expecting much commitment. Make them think about it, internalize it and agree to a list you come up with as a family.
Do hold a meeting with family business owners to develop a set of family and business values that you arrive at independently and make your own.
Do start meetings with your immediate family to talk about values in the home. Encourage children to come up with good values and how they apply to different situations encountered in their daily lives. Values learned at home will migrate into your business.

Now that wouldn't be a bad thing at all, would it?

As part of our Strategic Planning Process, Shamrock Growth Associates can facilitate a process where your family business owners develop a set of shared values. Later, we can also facilitate a process for expanding this list into a set of shared values for the business.